Olivia Mitchell (Dublin South, Fine Gael)

I move amendment No. 1:

In the last line after "2006" to insert the following:

", and furthermore, Dáil Éireann resolves that—

—the Minister for Finance shall gain the approval of Dáil Éireann before allowing any reduction of the State's shareholding in Aer Lingus Group plc below the 25.1% referred to in the general principles;

—any approval granted by Dáil Éireann for the general principles of the disposal of shares in Aer Lingus Group plc shall, if not acted upon, expire within four months of the passing of this resolution; and

—all shares in Aer Lingus Group plc to be issued or placed in the initial public offering shall be valued and sold at an equal unit price per share to all investors and there shall be no price differential or distinction made between those shares, the proceeds of the sale of which go to the central fund of the Exchequer, and those shares, the proceeds of the sale of which go to Aer Lingus Group plc."

I had hoped to withdraw this amendment and submit a new amendment based on the flaw I identified earlier but I understand that is not permissible. I ask the Minister to consider what I say before 4 p.m. and not to proceed with the motion as published.

Fine Gael has always believed that Aer Lingus's best interests are served by allowing it access to private capital and the commercial freedom to respond quickly and appropriately to the often volatile market conditions in the aviation sector. This is not an ideological position or decision, it is purely practical. We are aware of the extremely competitive, volatile and difficult environment in which any airline now operates, subject to external shocks, local and global political conditions, natural disasters and fuel price fluctuations, over none of which any airline has control regardless of whether it is in the public or private sector.

We do not believe private ownership is the panacea for a successful airline. There are no guarantees but we believe that Aer Lingus's best chance to survive and prosper lies in private ownership. It is already competing with airlines that have access to private capital and that can respond to rapidly changing market conditions without reference to a lethargic, ponderous and cautious political system. We should not spancel or disadvantage Aer Lingus vis-À-vis the other airlines with which it must compete.

However, from a position of support in principle we are now asking, as are many members of the public, if this sale makes any sense and whether it is, in fact, a sale or just a giveaway. It is difficult to conceive of a less propitious preparation for an IPO. Time and again, indecision, lethargy and procrastination postponed a decision until the timing, the most crucial variable in a flotation, was no longer in the Government's control. Foot and mouth disease, the events of 11 September 2001, a general election, a fuel crisis and, finally, sheer petulance, when the Taoiseach refused to be pushed into a sale by a management increasingly desperate for a decision, took the initiative from a Government simply unwilling or unable to make a decision.

The Government lost the best airline management team in Europe. It was forced into another year long delay while new management was found and got established. In the meantime, market conditions deteriorated, the price of airplanes escalated, the price of fuel went through the roof, other competing airlines positioned themselves on the best routes to the best destinations, restructuring at Aer Lingus stalled and the cost base of the airline grew to 50% more than that of the average European airline.

Desperation set in and the Taoiseach, who will do anything for a quiet life, sent word to the management that it was to buy peace at any price. That is precisely what the management did, with a generosity with the taxpayers' asset that leaves us reeling. I am not the only one questioning if it makes sense to pay €250 million to employees for permission to raise €400 million. It certainly devalues the airline in the eyes of a potential investor and even the employees must be wondering if this package, with all its hostages to fortune, is really in their long-term interests.

Given that introduction, we can be forgiven for being a little wary of giving our unmitigated support to the sale. With considerable prescience, we were wary in 2004 when the Aer Lingus Act was passed. At that time Fine Gael requested that what would amount to a White Paper in all but name be presented to the House for detailed debate and that this debate would take place early enough in the process to allow an input into the decision-making process. It was envisaged that there would be a comprehensive analysis of the potential gains and losses of a sale, if the gains would outweigh the losses or vice versa, identification of the extent of the losses, for instance, in terms of the country's strategic interests, and how those interests could be protected. The Minister of the day thought this condition entirely reasonable, saying:

I will produce a paper laying out the Government's position and the position of the company in good time to allow for discussion on it before finalisation of proposals for change of ownership . . . It is appropriate that any such paper be published in time to make a difference as opposed to it being published when the die is cast . . . There are serious issues, and it is my intention to address them in the position paper about which I am talking. I will produce it in good time for members to consider it and make a serious input into the process.

That never materialised, no strategic analysis was ever produced of why we were selling Aer Lingus or how we would go about it while protecting our strategic interests. The Dáil has had no input into the nature of the sale. To compound that breach of faith, the general principles document, which the Minister agreed would be the basis for giving us all the information, is an insult to the Dáil and to the taxpayers who own this company.

The principles outlined here are nothing more than an outline of the procedure to be followed by any company in the placing and issuing of shares. We could get this information from any text book or website. It adds nothing to our knowledge and makes it impossible for us to play our role as a watchdog for the public.

It is even worse than that. Not alone does the Minister tell us nothing, he cannot even get the procedure right. The legislation requires that he gets approval for the principles of disposal. They must be laid before the House and approved by the Dáil, but the motion calls for the approval of the disposal of the shares. Legally the Dáil cannot do that. The motion is not what is required by the legislation and we are bound by that.

In the sorry saga of the sale of Aer Lingus this is just another monumental mess — gross incompetence, gross indifference or gross carelessness. Worse, it is yet another example of the arrogance of this Government, reflecting the view that the Dáil does not really matter and anything is really good enough. It is not even necessary to have regard for primary legislation.

This is a dud motion. If the Minister pursues it and clings to belief in its validity, any sale following this flawed approval will be unlawful. The Minister should consider that before we vote on this at 4 p.m. It will put PPARS and electronic voting machines in the ha'penny place in terms of the cost to the taxpayers. If he has faith in his legal advisers, the Minister should go to his underwriters and ask them if they are willing to expose themselves to the loss of huge sums on behalf of the taxpayer. This will be challenged and, at the very least, a judicial review will be granted.

If the Minister wants approval today for a September sale, he must accept my amendment or introduce one of his own before he goes home this evening or he will have egg on his face, the sale will be further delayed and the airline will be in jeopardy and further exposed to swings in the notoriously volatile market for airlines.

To say that the principles are vague is to understate it. There is simply no information on which the Opposition or Government backbenchers can make an informed decision. We are acting on behalf of the real owners of Aer Lingus, the citizens of Ireland. If this were a plc sale of shares, all information about the sale would have to be made available to shareholders at a general meeting so that they could give their approval. We, however, get nothing. In a few weeks the prospectus will give all relevant information to the buyers but, bizarrely, the seller cannot even be told how much is to be sold. We do not know how much is to be raised for Aer Lingus or how much is to be raised for the Exchequer. That is basic information.

The share price will be determined by the amount needed to be raised by the new share issue. Raising the required capital for Aer Lingus is naturally a vital concern, but concern for Aer Lingus should not cloud the Government's judgment about the timing of the issue and about what would be an acceptable yield to the taxpayer. I have said before that the Government must have a predetermined floor price below which the sale becomes untenable.

It is my job to defend and the taxpayers. In doing that, I do not want their share of the proceeds to become the residual, perhaps offered at a lower price than the issue price to ensure the success of the new issue in raising the target funds for the airline. That is not acceptable to me or to Fine Gael. We will not tolerate a giveaway or a fire sale of a national asset which has been invested in and supported for more than 70 years by the people. We will support a sale, but not a sell out or giveaway.

The only control the Dáil can exercise to prevent a knock-down price for the taxpayer, a tactic which could be pursued by the Minister to ensure a successful new issue for the airline, is to establish some kind of floor price below which it becomes unacceptable. The Dáil cannot let the Minister sell at any price.

On the other hand, we cannot nominate a floor price without jeopardising maximising its value. We can, however, demand that the price per share to the taxpayer would be no lower than the price per share to the airline. It may be that the shares will face a buoyant demand and I hope that is the case, but I cannot depend on it and my job is to be the watchdog of public assets on behalf of the citizens of Ireland of whose asset we are now disposing.

That is one amendment I have submitted. The second amendment also seeks to maximise the value for the taxpayer by ensuring that the sale occurs at the optimum time. Voting for disposal by the Dáil is not voting for disposal at any price and, as the Minister is aware, the price may vary dramatically over time. Therefore, it is reasonable to place a time limit on the approval and so avoid the pitfall of giving carte blanche to a Government which may become desperate to sell, even at the bottom of the market and at a price unacceptable to the shareholders. Therefore, if the Government fails to sell within four months of today, the motion would require fresh Dáil approval for disposal.

My final amendment clarifies and leaves outside any doubt the requirement to seek Dáil approval should the Government, of whatever hue, wish to allow the dilution of the State's 25.1% shareholding. This percentage, we are told, is the minimum required to protect our national strategic interest. If that is the case and the Government thinks it can guarantee that, it is reasonable to require a vote of the Dáil if we are to abandon that objective.

The Minister has indicated an intention to change the articles of association to prevent the disposal of the Heathrow slots. I am not sure to what extent this attempt would be successful in the longer term, but it is not the disposal of the slots we should be worried about — the Minister has missed the point. Aer Lingus does not own the slots and we are not really concerned about their disposal. We are concerned about the transfer of the use of the slots from the base in Dublin to some other base which might be more valuable in future. The Minister should be honest and admit this is a real danger and that in the longer term, there is probably little we can do to prevent it.

The Minister has come to us with a flawed motion during the last Dáil slot on the last day of the session. It may now be inconvenient for the Government to accept that its motion is simply not what the legislation calls for and that on an important issue like this, on the disposal of something to which every citizen feels some sort of attachment, the Opposition must be allowed to speak and offer some protections for the public.

We are not being irresponsible. We want a successful sale and a thriving airline. We understand that sentiment in the market can change overnight and we appreciate commercial sensitivity. We comprehend that the price will be set by market demand at the time of offer and we do not want to do anything that would jeopardise attaining the optimum price. However, the public is entitled, before any sale, to know how much it is intended to sell, how much it is expected to raise and to be reassured that in no circumstances will its airline be given away.

The amendments I have submitted should go a long way to ensuring that the public can be reassured. I ask the Minister to support the amendments and, more significantly, not to allow the House to adjourn without considering the nature of the flawed motion put before us. The Minister has until 4 p.m. to consult his legal advisers. Otherwise he will be going home with serious problems. The Minister will expose the taxpayer to huge potential losses. The sale of the airline will be jeopardised and the Minister will certainly have egg on his face.

See this speech in context